Huge hit worth the pain as McIlroy looks to new horizons
It was in a small office on this Dublin street, in the early hours of Wednesday morning, that Rory McIlroy finally concluded his settlement with his former agent
Rory McIlroy’s out of court settlement with his former agents brings to mind that scene from Monty Python’s “Life of Brian” when the kindly Roman centurion is lining up the locals for execution.
“Crucifixion?”
“No, freedom actually.”
That, in a nutshell, is what the world No 1 has saved himself by writing a cheque which is believed to be close to $30 million — well in excess of $20m for his former agent and another €5m (euro) for his own, considerable legal fees. Painful? Yes. Worth it? Almost certainly.
Compared to a long and expensive High Court trial, the outcome of which was far from certain given the contracts he had signed with Horizon Sports Management, paying his bills now and taking control of his own destiny via Rory McIlroy Inc. will save the 25-year old Co Down man tens of millions going forward. Perhaps more. Like Roger Federer, McIlroy will call his own shots when it comes to his money from now on.
While there are those who point to the fact that he had won five tournaments, including two majors, since he decided to sue Conor Ridge and other on 27 September 2013, there is no telling what might have emerged from a very public trial that was scheduled to last up to eight weeks. Sure, he's kept on winning right through the break up but who knows what effect at trial might have had on the greatest golfing talent the world has scene since Tiger Woods.
Quite apart from looking after the nitty gritty of a golfer’s career from a financial point of view, an agent is also privy to myriad professional and private matters and while there is no question that McIlroy has done anything wrong, what he described as a "nasty" and "tedious" legal battle offered no guarantees of total discretion in the court room — hell hath no fury like an agent scorned.
With the opening day of the Masters Tournament now just 63 days away, getting closure on a case that has been festering for close to two years can only be good for McIlroy’s chances of completing the career Grand Slam at Augusta National.
It also means he can get on with the business of cashing in on his talent. He hasn't signed a new endorsement deal since he joined forces with Bose and Omega early in 2013 — just weeks before his relationship with Horizon broke down irretrievably.
That the case had to go to the steps of the High Court is a surprise given that a settlement in mid-2013 would have cost him far less in terms of commissions and fees owed, not to mention his own legal costs and those of his entourage. Urged by the likes of Dermot Desmond to settle back then, relations had deteriorated to such an extent that it became a personal war.
The sums involved in the case are mind-blowing but not altogether surprising considering McIlroy signed a five-year, $20m a year deal with Nike at the start of 2013. A $100m contract changes the stakes and while some would concede that McIlroy had a point in describing commissions of 20% on his Nike deal and 15% on other endorsement contracts generated or negotiated for him by his agents as excessive, he is now master of his own destiny in that regard.
Photographers and onlookers wait for a glimpse of Rory McIlroy outside the Four Courts last Tuesday afternoon. He would not appear until the building closed after 9pm but only to head to another office nearby for late night talks with his legal counsel.
Horizon, with whom he had a contract until the end of 2017, stated in their Statement of Claim that in the 18 months they were his agents, they negotiated contracts that would generate $140m for Rory McIlroy over that time frame.
That figure did not include any prize money or performance bonuses that McIlroy might earn — for remaining at World No 1, for example, or for picking up Major wins or winning Olympic medal to name just a few possible items.
Last November’s protracted discovery hearings relating to mobile phones belonging to Mcilroy and his entourage being reset to factory settlings brought a modicum clarity to the question of what Horizon might be seeking in terms of a settlement.
Fees owed to that date amounted to just under $9 million with another $11 million due on the contracts that were scheduled to run out at the end of 2017. Forget damages and costs for a moment.
This base of $20m would not include any possible commission on bonuses earned by McIlroy over the next three years but given that he owed $9m for the first 18 months, another $18m for the next 36 months would amount to a bill of around $27m.
Add to that Horizon’s potential legal costs of some €2.5 million (euro) not to mention another €4-5 million for his own barristers and those employed to represent the CEO of Rory McIlroy Inc, Donal Casey, his Tour Manager Sean O’Flaherty and his father, Gerry, in the long build up to the trial and the bill is considerably larger. There were 98 different entries in the court lists, thousands of documents examined, dozens of affidavits sworn and as many computers and phones forensically "x-rayed".
Several judges became familiar with a case, which began nearly 500 days ago.
Little wonder McIlroy, having negotiated in offices at the Four Courts until it closed at 9pm on Tuesday night, shifted his centre of operations to the offices of his legal advisors in the nearby Arran Quay area to work away on a resolution until the wee small hours of Wednesday morning.
Even allowing for a late night, many expressed surprise that neither he, nor any of his backroom team, were in court alongside Conor Ridge at 11am to hear his barrister Paul Gallagher tell Mr. Justice Brian Cregan that the parties had resolved their differences.
Perhaps it was a negative photo op he could do without and he was soon winging his way back “home” to Florida to get ready for the real battle — the quest for the green jacket at the Masters. In more ways than one, this was an unusual court battle that produced positive outcomes for two parties.
The brief joint statement, they wished each other well for the future, bring to an end one of Irish golf’s least palatable chapters.
With Horizon managing Shane Lowry and McIlroy master of his own destiny, wishing each other well was as good start as any to a new adventure for all involved.
Ridge sat in court alongside one of his more recent employees, Padraic O'Reilly, and embraced him with joy as the Judge congratulated all the parties on the successful resolution of the case and wished them the best in their respective careers as sports agents and sportsmen.
McIlroy was nowhere to be seen, of course, as he prepared to soar high over the Atlantic.
“Crucifixion?”
“No, freedom actually.”
